Zerohedge

Authored by Turner Wright via CoinTelegraph.com,

Lawmakers in the Arizona House of Representatives passed two bills that could allow the state to adopt a reserve using Bitcoin or other cryptocurrencies.

In a third reading on April 28 of Senate Bill 1025 (SB1025), a proposal to amend Arizona’s statutes to allow for a strategic BTC reserve, 31 members of the Arizona House voted in favor of the bill, with 25 opposed. A similar bill, SB1373, to establish a state-level digital assets reserve, passed with 37 lawmakers in favor and 19 voting nay.

“This bill basically takes the approach that probably 15 other states are considering the same legislation nationwide that allows the treasurer to invest up to 10% into, probably mainly Bitcoin but other things as well,” said State Representative Jeff Weninger on SB1025.

“I think this probably would start as a ‘may’ for the foreseeable future, but as things continue to pivot towards Bitcoin and these things, would have that already in place in the future.”

Voting for SB1025 in the Arizona House of Representatives on April 28. Source: Arizona State Legislature

The approvals bring the bills closer than any other state-level initiative in the US to getting a cryptocurrency or Bitcoin strategic reserve signed into law. Similar legislation proposed in New Hampshire passed the state’s House in April and is expected to head to the Senate for a full floor vote soon.

Arizona Governor Katie Hobbs announced on April 17 that she intended to veto any bill until lawmakers had a “serious, bipartisan funding solution that protects healthcare for Arizonans with disabilities.” However, with the passage of such legislation on April 24, the governor could be more open to signing SB1025 or SB1373 into law.

Federal plans to establish a national crypto reserve

The state-level efforts to create Bitcoin reserves come amid a push from US President Donald Trump and Republican lawmakers to do the same in the federal government. 

Trump signed an executive order in March with a proposal for a “Strategic Bitcoin Reserve” and a “Digital Asset Stockpile.”

Wyoming Senator Cynthia Lummis, a crypto advocate, proposed that Congress pass legislation that could allow the US government to hold more than 1 million BTC, in part through crypto seized through civil or criminal forfeiture. Some lawmakers have suggested Lummis’s bill was an attempt by Congress to codify Trump’s executive order into law.

Pakistan’s military says it shot down an Indian spy drone in the Kashmir region, soon after the country’s defense chief warned that intelligence shows an Indian army incursion is ‘imminent’.

The unmanned drone reportedly breached the Line of Control (LOC) in Kashmir, Pakistani state-run media said, and it was subsequently shot down amid the air space incursion. Pakistani defense officials described to The Associated Press that the drone flew hundreds of feet into Pakistani-administered Kashmir.

Defense Minister Khawaja Asif the day prior confirmed the nation’s military is currently on high alert and he had “reinforced our forces” – after multiple days of sporadic exchanges of gunfire along unspecified border posts.

“In that situation, some strategic decisions have to be taken, so those decisions have been taken,” Asif told Reuters, also ominously describing that Islamabad would only consider using its nuclear arsenal in response to “a direct threat to our existence.” 

There’s as yet been no noticeable incursion, and it remains unclear what evidence for this forecast Pakistan’s military and intelligence services might have.

Last Tuesday’s deadly militant attack on tourists in Kashmir, which saw 26 Indian tourists get executed after the gunmen sought to identify Hindus among the group, resulted in the Indian government promptly accusing Pakistan of harboring the Islamist terrorists which committed the atrocity, which Islamabad angrily rejected.

The nuclear-armed neighbors have already fought two historic wars over the Kashmir region, and fears are rising that another one may soon be on the horizon – also after both sides have sent military reinforcements to the respective regions they administer. Amid a massive manhunt, India identified two detained suspected militants as Pakistani.

The New York Times described Saturday that “Pakistani solders fired at an Indian position first and India responded in kind, according to local news reports, which said that “the exchange was brief and that there were no casualties.” Precise locations of these live fire incidents have not been disclosed.

Missile and nuclear saber-rattling has meanwhile ensued:

India’s navy test-fired missiles on Sunday, showcasing its ability to carry out “long-range, precision offensive” strikes, as tensions with Pakistan rise after last week’s terrorist attack in Indian-administered Kashmir that killed 26 civilians.

“Indian Navy ships undertook successful multiple anti-ship firings to re-validate and demonstrate readiness of platforms, systems, and crew for long-range precision offensive strike,” the navy posted on X, as the prime minister, Narendra Modi, promised a “harsh response” to the attack at a tourist site, the deadliest against civilians in Kashmir in 25 years.

As for the other side, a Pakistani minister, Hanif Abbasi (though he’s not in defense or security) days ago warned that Pakistan’s nuclear arsenal of more than 130 missiles was “not kept as models” and was aimed “only for India … these ballistic missiles, all of them are targeted at you” – The Guardian noted.

The United Nations has urged restraint, and Pakistan has called for an independent investigation into the Kashmir terror attack, which it says it had nothing to do with. It has also called on Russia and China to mediate and assist with a potential investigation.

If gunfire continues to be exchanged between the two militaries, also amid reports that Pakistani visa holders are being promptly booted from the country amid the diplomatic crisis – clashes could accelerate toward open war. 

India’s Chief Minister of Jammu and Kashmir Omar Abdullah has meanwhile said there must be a “decisive fight against terrorism and its origin.” Indian officials have continued to heap accusations that ultimately Islamabad either supports these groups or at least turns a blind eye.

Pakistan ACCUSES India of running terror network

Armed Forces spox claims NO EVIDENCE to suggest Pakistan’s role in Pahalgam attack pic.twitter.com/xwdPOMpWUo

— RT (@RT_com) April 29, 2025

More observations via Rabobank…

* * *

Pakistan just warned of imminent India military action against it in response to a recent terror attack in Kashmir, to which China stated: “As Pakistan’s ironclad friend and all-weather strategic cooperative partner, China fully understands Pakistan’s legitimate security concerns and supports Pakistan in safeguarding its sovereignty and security interests,” with rumours it and Turkey are sending Pakistan weapons. 

India will surely be looking for mirroring statements and actions from those who want more trade with it. The UK and the EU aren’t going to provide them; BRICS is a joke given what C just said about I, via P; and that only leaves the US.

Authored by Naveen Athrappully via The Epoch Times,

The homeownership rate in the United States declined to 65.1 percent in the first quarter of this year, 0.6 percentage points lower than in the previous quarter, the U.S. Census Bureau said in a statement on April 28.

“This quarter’s homeownership rate is the lowest since Q4 of 2019,” real estate listings website Realtor said in an April 28 report. 

“The homeownership rate spiked in early 2020 before settling in the mid 65% – 66% range through the pandemic and the years following.”

Realtor attributed the decline in homeownership rate in the first quarter to a lack of affordable housing.

“Though inventory levels continue to rise on an annual basis, the number of homes for sale is still below pre-pandemic levels, which has kept upward pressure on home prices and limited affordable options for many households,” it said.

The homeowner vacancy rate, which is the proportion of properties owned that are vacant and for sale, was 1.1 percent higher than in the first quarter of 2024 but remained the same in the fourth quarter of 2024. This was higher in major cities compared to the suburbs. The vacancy rate was the lowest in the Northwest and highest in the West.

According to Realtor, vacancy rates had remained below the 1 percent level from the first quarter of 2022 to the third quarter of 2024, which emphasized “the lack of for-sale inventory,” it said.

“Though recent inventory gains have kept vacancy at a recent high, there are still far fewer vacant homes than was typical in the years pre-pandemic, suggesting that inventory still has some ground to cover,” it said.

Overall, roughly 89.5 percent of all housing units in the United States were occupied in the first quarter of this year, with the properties occupied by either homeowners or renters, the bureau said.

In a Feb. 10 report, JP Morgan said the lower vacancy rates suggest potential supply constraints in the market.

“Vacancies indicate that there are enough homes available, but these may not be the right type, in the ideal location, or at an affordable price point,” it said, adding that the housing market demand was “seriously suppressed” by elevated interest rates.

The weekly average rate on a 30-year fixed-rate mortgage has remained above 6.5 percent for the entire first quarter of this year, according to data from Freddie Mac.

The elevated rates make mortgage payments more expensive, thus deterring prospective buyers seeking affordable homes.

John Sim, head of securitized products research at JP Morgan, said the housing market situation “is not going to change until we get mortgage rates back down toward 5 percent, or even lower.”

“And we aren’t forecasting mortgage rates to breach 6 percent in 2025—they should ease only slightly to 6.7 percent by the year-end,” Sim said in a statement.

Easing Housing Conditions

There are signs that housing costs are cooling down as home prices fall. In the four weeks ending April 20, the median sales price of homes fell year over year in 11 out of the 50 populous metros in the United States, real estate brokerage Redfin said in an April 24 statement.

“Home prices are falling in many major metros—and price growth is decelerating nationally—because many house hunters are backing off, but the number of homes for sale is holding up,” the brokerage said.

“Home tours are slowing, mortgage-purchase applications are falling, and Redfin agents in many parts of the country report that would-be buyers are ultra-cautious amid high housing costs and widespread economic uncertainty.”

Chen Zhao, Redfin’s economic research lead, advised sellers to price their homes “fairly.” Sellers may have to lower their asking prices in order to “sell quickly and avoid giving concessions,” he added.

As for mortgage rates, Sam Khater, chief economist at Freddie Mac, highlighted in an April 24 statement that the 30-year fixed-rate mortgage rate has fluctuated by less than 20 basis points over the past couple of months.

This stability bodes “well for buyers and sellers alike,” he said.

Meanwhile, a bipartisan group of lawmakers reintroduced the Rural Housing Service Reform Act this month, aimed at strengthening the supply of affordable housing in rural communities and small towns, according to an April 3 statement from the office of Sen. Tina Smith (D-Minn.).

The Act proposes several key measures, including requiring the Department of Agriculture to expedite the loan approval process and updating rules for home repair loan programs to make it less burdensome to obtain smaller loans.

“Improving homeownership opportunities, particularly in rural areas, is critical for the well-being of South Dakota families,” Sen. Mike Rounds (R-S.D.), one of the lawmakers who introduced the bill, said in a statement.

The Act “would streamline federal programs and remove barriers to homeownership, making this dream a reality for more South Dakotans. It would also preserve existing affordable housing and rental assistance in rural areas,” he said.

Ukraine’s President Volodymyr Zelensky has blasted President Putin’s unilaterally declared three-day ceasefire set for May 8-10, which correspondents with Russia’s Victory Day celebrations, as an “attempt at manipulation.”

“Now there’s a new attempt at manipulation: for some reason, everyone has to wait until May 8,” Zelensky said in his daily address Monday evening. This will mark the 80th anniversary for Moscow’s World War 2 commemorations, a major national civic holiday.

Ukraine has instead offered an immediate truce with Russia for “at least 30 days.” Ukrainian Foreign Minister Andrii Sybiha previously questioned, “If Russia truly wants peace, it must cease fire immediately. Why wait until May 8?“

Moscow has rejected any premature longer term truce ahead of lasting settlement and territorial concessions from the Ukrainian side, fearing that it would just be used to regroup and rearm along the front lines.

Russia has further rejected this new call for a 30-day truce instead of the three day ceasefire. “It’s difficult to agree to such a long-term truce without answers to the questions raised by Putin,” Kremlin spokesman Dmitry Peskov told reporters.

“We haven’t heard the Kyiv regime’s reaction, and it’s unclear whether they plan to join the truce,” Peskov said. “Nevertheless, we hope the Russian president’s peace initiative will be appreciated,” he added. “The first step is to start the negotiation process — everything else is secondary.”

Kiev did appear to observe the prior Easter truce, though each side accused the other of some violations. But it set a precedent which Moscow is hoping to follow on with in pushing the V-Day ceasefire; however, skeptics have said this is really to ensure no disruptions happen at national public commemoration events (such as inbound drones in the Moscow region).

Trump admin officials have called this week “critical” for determining whether lasting peace in Ukraine can be forged:

Rubio said that the coming week will be “very critical” for the White House as it makes a “determination about whether this is an endeavor that we want to continue to be involved in.”

“There are reasons to be optimistic, but there are reasons to be realistic,” Rubio said, adding: “We’re close, but we’re not close enough.”

“Throughout this process, it’s about determining, do both sides really want peace and how close are they or how far apart they are after 90 days of effort here … that’s what we’re trying to determine this week,” Rubio said of negotiations.

But it’s unclear what this ultimatum of sorts (given to both sides?) really means. Will the US stop arming Ukraine if no peace deal is reached? Will more sanctions simply be piled onto Moscow?

Trump is increasingly frustrated with leaders of both Russia and Ukraine: White House.

Trump is increasingly frustrated with leaders of both Russia and Ukraine — White House.

🇺🇦 Meanwhile, Ukraine: “We agree to an unconditional ceasefire. Every day. Constantly. We’re literally begging: just stop the fire. We are ready. No conditions — just STOP killing us.”

🤡… pic.twitter.com/572n3UCezc

— Maria Drutska 🇺🇦 (@maria_drutska) April 28, 2025

President Trump has warned the Russians that his patience will soon run thin, amid accusations from hawks that Moscow is simply stalling for the sake of battlefield gains. Putin this month declared the full liberation of Kursk region, leaving Zelensky with no cards to play at all. Trump himself has acknowledged that Zelensky has no real leverage at this point.

One month after the BLS reported that in February the labor market reverted to its deteriorating trendline, when the US had 7.568 million job openings (missing estimates of 7.655 million), a drop from the 7.762 million in January (revised from 7.740 million), and down 877,000 from the prior year, moments ago the latest JOLTS report showed that in March the labor market continued to deteriorate, and the number of job openings declined again, this time by 288K, from a downward revised 7.480MM to 7.192MM, the lowest since September 2024.

According to the BLS, the drop in job openings was across most sectors, with an emphasis of construction, transportation, private education and real estate. The lone increase was reported in finance and insurance.

However, the biggest surprise was precisely where we noted last month that something doesn’t make sense. 

Recall last month we said that “as always, there is a reason to doubt this particular set of numbers – just as there was reason to doubt every set of numbers from Biden – because according to the February JOLTS report, the number of Federal Government job openings was essentially flat both sequentially and YoY.”

Well, not anymore, and in March, the number of government job openings plunged by 36K, from 134K to just 98K, the first sub-100K print since the covid crash, some five years ago!

In  the context of the broader jobs report, in February the number of job openings was 109 more than the number of unemployed workers (which the BLS reported was 7.083 million), down from 428K the previous month, and the lowest differentials since the covid crash.

Still, as noted previously, until this number turns negative, the US labor market is not demand constrained, and a recession has never started in a period when there were more job openings than unemployed workers.

Said otherwise, in January the number of job openings to unemployed rose modestly to 1.1, the highest since last May if on the low end of the pre-covid range in 2018-2019.

While the job openings data was a miss and a drop, what softened the blow is that for the the number of hires unexpectedly rose to 5.411 million from 5.370 million, the highest since last October, and hardly screaming collapse in the labor market. Meanwhile, the number of workers quitting their jobs – a sign of confidence in finding a better paying job elsewhere – rose again, and in March hit 3.332 million, up from 3.250 million and the highest since July 2024.

How to make sense of this continued deterioration in the labor market, and especially in the government sector?

Well, as we explained in “Here’s What Trump Needs To Do For Powell To Quickly Cut Rates” to get the Fed to cut rates,
“all Trump has to do is simply maintain the current level of sharp layoffs – i.e., fully unleash Musk’s DOGE – in the parasitic government sector which will more than offset gains everywhere and lead to a spike in total unemployment, and Powell will have no choice but to finally capitulate.”

And judging by the sudden plunge in government job openings, don’t be surprised if Friday’s jobs report shows a huge drop in the number of actual government workers which pushes the broader unemployment rate higher and forces Powell out of his stupor.

 

GM stock dipped slightly Tuesday morning after the company pulled its annual profit forecast, citing significant uncertainty created by President Trump’s evolving trade policies, according to Bloomberg, WSJ and multiple other outlets. 

Despite reporting strong first-quarter results, the Detroit automaker warned investors not to rely on previous guidance due to the potentially “significant” impact of automotive tariffs.

“We’re telling folks not to rely on the prior guidance, and we’ll update when we have more information around tariffs,” GM Chief Financial Officer Paul Jacobson said during a media call. “Given the evolving nature of the situation, we believe the future impact of tariffs could be significant.”

The company’s decision comes as the White House reportedly moves to soften the impact of auto tariffs, preventing them from stacking atop existing duties like those on steel and aluminum. According to The Wall Street Journal, the administration will allow automakers to be reimbursed for overlapping tariffs, a change expected to be retroactive and officially announced before Trump’s rally in Michigan Tuesday evening.

Commerce Secretary Howard Lutnick confirmed a deal had been struck, though details remained scarce. The adjustments could offer temporary relief to domestic automakers, including GM, which assemble cars in the U.S. but rely on imported parts.

Nevertheless, GM’s leadership is urging caution. “We’re going to look for more clarity before we get into any forward projections of the tariff exposure,” Jacobson said.

In January, GM had forecast net income between $11.2 billion and $12.5 billion for 2025, excluding tariff impacts. It also projected adjusted pretax profit between $13.7 billion and $15.7 billion. That forecast is now shelved.

First-quarter results showed cracks forming. GM’s net income fell 6.6% to $2.8 billion, dragged down by weaker sales of highly profitable trucks and SUVs, along with rising warranty and labor costs. Adjusted earnings before interest and taxes (EBIT) slipped 9.8% to $3.49 billion, with EBIT-adjusted margins falling from 9% a year ago to 7.9%.

Revenue, however, rose 2.3% to $44 billion, surpassing analysts’ estimates of $43 billion. Adjusted earnings per share came in at $2.78, also ahead of expectations. GM credited a last-minute surge in car buying in March, as consumers sought to beat potential price hikes from new tariffs that began earlier this month.

While the results slightly exceeded Wall Street’s cautious predictions, they revealed growing challenges for a company that has ridden high profits in recent years. Jacobson pointed to an “unusually strong” first quarter in 2024 following the resolution of a United Auto Workers strike, suggesting 2025’s first quarter suffered by comparison.

Earlier this month, GM reported U.S. sales jumped 17% year-over-year to 693,363 units, led by strength in trucks and EVs across its Chevrolet, Cadillac, Buick, and GMC brands. Full-size pickups, particularly the Chevrolet Silverado and GMC Sierra, delivered their best first-quarter sales since 2007.

Nonetheless, GM is bracing for a turbulent year ahead. The company delayed its analysts’ call until Thursday, an unusual step reflecting the fast-changing policy environment.

Chair and CEO Mary Barra, in a statement, said, “We appreciate the productive conversations with the President and his Administration and look forward to continuing to work together.”

In the meantime, GM announced it would pause new share buybacks beyond the $2 billion plan slated for completion in the second quarter, pending greater economic clarity. It stressed there was no current need to raise additional capital.

Update (1020ET): Well that didn’t take long…

Amazon has just issued a statement denying PunchBowl’s reporting and explaining that showing tariffs costs on the main Amazon site was “never a consideration”:

“The team that runs our ultra low cost Amazon Haul store has considered listing import charges on certain products. 

This was never a consideration for the main Amazon site and nothing has been implemented on any Amazon properties.”

Amazon’s share price is rebounding on the statement…

Of course, by NOT exposing these numbers (which the leftists and legacy media were cheering so loudly), Jeff Bezos has just shifted the crosshairs once again:

Bezos is once again the second most hated billionaire by the left

— zerohedge (@zerohedge) April 29, 2025

So did PunchBowl just make this up?

*  *  *

Shares of Amazon tumbled to premarket lows Tuesday after White House Press Secretary Karoline Leavitt called the company’s recent decision to display the effect of tariffs on products a “hostile and political act,” adding “why didn’t Amazon do this when the Biden administration hiked inflation to the highest level in 40 years?”

“It’s not a surprise,” Leavitt continued, adding “Amazon has partnered with a Chinese propaganda arm. So this is another reason Americans should buy American.”

Watch:

White House calls Amazon’s decision to cite Trump tariffs cost on products a “hostile and political act.”

“Why didn’t Amazon do this when the Biden administration hiked inflation to the highest level in 40 years?” pic.twitter.com/fdof5noJp4

— Josh Caplan (@joshdcaplan) April 29, 2025

AMZN shares are trading over 2% lower in the pre-market following the remarks.

The e-commerce giant will soon display how much of an item’s cost is derived from tariffs – ‘right next to the product’s total listed price,’ Punchbowl News reported earlier Tuesday.

Of note, companies like Amazon and Shein Group Ltd. are bracing for a 120% tariff on many of their products due to the US government’s decision to end the “de minimis” exemption which allowed goods valued at under $800 to pass into the US without tariffs or customs duties.

Why does Amazon refuse to disclose where its crap products from companies with fake names are manufactured. Amazon won’t disclose country of origin, but it knows the exact country-specific tariff? https://t.co/KU7gr6ILMe

— Sean Davis (@seanmdav) April 29, 2025

According to Treasury Secretary Scott Bessent, who attended the press briefing, Amazon’s move to highlight tariffs is unfair given that the costs of policies implemented by other administrations (including regulations) aren’t being broken out by Amazon.

“The big tax on consumers that goes unnoticed is deregulation or regulation, and we are deregulating and bringing that down,” Bessent said. “So you know, from a household income point of view, we would expect real purchasing increases that we’ve seen over the first 100 days, and we would expect that to accelerate.”

Needless to say, this “hostile and political” move by Amazon is catching heat…

Executive order mandating that on-line sales identify country of origin for each product.

— Carnot’s Law (@Len54Len) April 29, 2025

Absolutely right. Amazon’s decision is clearly political. They didn’t flag inflation impacts under Biden, but now single out tariffs under Trump.

— VJT (@KelvinCold1234) April 29, 2025

Another day, another sentiment measure disappoints…

US consumer confidence fell in April to an almost five-year low on growing pessimism about prospects for the economy and labor market due to tariffs. The Conference Board’s gauge of confidence decreased nearly 8 points to 86, the weakest since May 2020. This was the fifth straight monthly decline, the longest such stretch since 2008. 

Worse still, consumer expectations for the next six months plunged to the lowest level since 2011, while a gauge of present conditions also fell.

“Consumer confidence declined for a fifth consecutive month in April, falling to levels not seen since the onset of the COVID pandemic,” said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board. 

“The decline was largely driven by consumers’ expectations. The three expectation components—business conditions, employment prospects, and future income—all deteriorated sharply, reflecting pervasive pessimism about the future. 

Notably, the share of consumers expecting fewer jobs in the next six months (32.1%) was nearly as high as in April 2009, in the middle of the Great Recession. In addition, expectations about future income prospects turned clearly negative for the first time in five years, suggesting that concerns about the economy have now spread to consumers worrying about their own personal situations.

However, consumers’ views of the present have held up, containing the overall decline in the Index.”

Labor market conditions weakened, extending their very recent downtrend…

High financial market volatility in April pushed consumers’ views about the stock market deeper into negative territory, with 48.5% expecting stock prices to decline over the next 12 months (the highest share since October 2011). 

Meanwhile, average 12-month inflation expectations reached 7% in April – the highest since November 2022, when the US was experiencing extremely high inflation. 

Notably, the NYFed’s measure of inflation expectations (and the market’s measure of inflation expectations) are NOT screaming higher like UMICH and CONF BOARD surveys…

Finally, we note that April’s fall in confidence was broad-based across all age groups and most income groups. The decline was sharpest among consumers between 35 and 55 years old, and consumers in households earning more than $125,000 a year.

The decline in confidence was shared across all political affiliations.

For the first time the governments of Russia and North Korea have issued coordinated statements of high-level confirmation that North Korean troops were sent to fight for Russia against Ukraine, having been deployed months ago.

The statements described that the large foreign troop contingency helped liberate Russia’s Kursk border region, after a Ukrainian incursion and occupation which stretched all the way back to last August.

Putin said Monday that the population would never forget the ‘heroic’ feats of North Korea’s special forces. “We will always honor the Korean heroes who gave their lives for Russia, for our common freedom, on par with their Russian brothers in arms.”

He further declared they had helped defeat the “neo-Nazi formations” sent by Ukraine and that this was based on “solidarity” and “genuine comradery”

Putin finally confirms North Korean troops have been fighting against Ukraine, pursuant to the mutual defense provision of the June 2024 treaty signed by Russia and North Korea. At the time, it was ambiguous how robust that treaty was to believed to be. Turns out, quite robust pic.twitter.com/PbxjRrkVeL

— Michael Tracey (@mtracey) April 28, 2025

It was only days ago that Putin officially declared the full liberation of Kursk had been accomplished, after the Ukrainians were pushed out of the final border village of Gornal.

Along with huge amounts of artillery shells and likely even ballistic missiles, North Korea has sent “14,000 troops, mostly members of its special operations units, to Russia, including 3,000 dispatched earlier this year to replace those killed or wounded, according to South Korean officials,” the NY Times writes.

All of this was based on a mutual defense treaty inked in Pyongyang last summer. While details have been somewhat scant, it has become clear that the treaty is “quite robust” – as journalist Michael Tracey has pointed out.

As for North Korea’s Kim Jong Un, KCNA quoted him Monday as saying, “They who fought for justice are all heroes and representatives of the honor of the motherland.”

North Korea “regards it as an honor to have an alliance with such a powerful state as the Russian Federation,” he added. Ukraine has claimed to have captured both North Korean and even Chinese troops. 

As for Kursk, at the height of the cross-border offensive Ukraine’s military had seized just over 530 square miles, but regional reports indicated a week ago that significant figure was down to less than just 20 square miles – and then came the final assault to liberate Gornal.

Prior South Korean intelligence reports have claimed the North Koreans lost over 1,000 casualties in Kursk. But nothing official on this has ever been issued from any side.

By Michael Every of Rabobank

Delusions of Homo Economicus aside, we each see the world differently via the unconscious cognitive ‘grid’ we all impose on it. Yet in highly unstable times, one needs to check if one’s grid is stable enough to cope.

A week after boasting it had achieved 100% renewables energy power for the first time, Spain’s power grid suffered a crippling blackout, along with Portugal’s. Apparently, this was due to over-reliance on what are always fluctuating power sources vs. the base power that comes from fossil fuels, nuclear, or storage batteries. 

Total chaos and a state of emergency ensued: those without cash couldn’t operate – most businesses didn’t; neither did trains, planes, or traffic lights. A never-before tried renewables-based grid black start had restored 3/4 of power at time of writing. The lessons from this shock are: 1) this is what a cyberattack on the West could look like – and we aren’t ready; and 2) as global energy expert @aberman12 makes clear, we can’t rely on renewables power without back-up batteries. Further massive investment is needed; or a return to fossil fuels or nuclear; or we run the risk of black outs from time to time.

Talking of shocks and massive investments, the US says it’s close to giving up on its peace deal for Ukraine: Europe is worried it’s going to walk away, leaving it to carry the defense can. Note recent rumors the UK is unwilling to send troops to Ukraine on concerns that it could lead to direct UK-Russia clashes. The same obviously applies for Europe. 

Therefore, the EU and UK will tomorrow announce a strategic partnership aimed at “maintaining global economic stability and our mutual commitment to free and open trade,” along with security cooperation – though whether that means either side will risk a Russia clash absent US cover remains to be seen.  Moreover, that’s ahead of a by-election and local elections this week where the Labor government was already going to get hit hard by the anti-EU/pro-US Reform Party – the size of that blow may increase in proportion to the commitment to that new UK-EU deal. Furthermore, how is that new partnership compatible with the UK –who are trying– and Europe –who reportedly aren’t– striking a US trade deal? Do they come as a package now, or not at all? 

Equally, the UK is reportedly also close to an FTA with India; yet India is close to a deal with the US that isn’t going to be for “free and open” trade with China. Likewise, Canada’s election –where Trump had called for people to vote for the candidate who would make it the 51st state– looks like seeing acting PM Carney as the one who will have to accept the “No more China” trade terms that Trump will impose, regardless of what he said pre-election.

Expand, or contract, your mental grid to see that “Free trade first” fluctuations aren’t compatible with baseload “security first” realpolitik.   

As an example, Pakistan just warned of imminent India military action against it in response to a recent terror attack in Kashmir, to which China stated: “As Pakistan’s ironclad friend and all-weather strategic cooperative partner, China fully understands Pakistan’s legitimate security concerns and supports Pakistan in safeguarding its sovereignty and security interests,” with rumours it and Turkey are sending Pakistan weapons. 

India will surely be looking for mirroring statements and actions from those who want more trade with it. The UK and the EU aren’t going to provide them; BRICS is a joke given what C just said about I, via P; and that only leaves the US.

Indeed, the White House is still expecting to bolt on its first new trade deal soon, as noted, likely with India, which could start a domino effect given the scale and potential of those two economies in tandem. At least that’s the plan.

The US will reportedly soften auto tariffs so they don’t stack with steel and aluminium ones, and those on auto parts will be eased. However, it says it’s up to China to de-escalate for a trade deal – which is by necessity and realpolitik more than a trade deal. That’s a message being sent and received on many levels for those who know how to look for the signs aside from those officially recognised by Bloomberg and the Financial Times.

Yet as reports flood in of US supply chains trying to move out of China, Beijing is allegedly blocking other countries’ attempts to buy China-made intermediate goods, and engineering talent, to ensure production of downstream goods stays at home. “Rules-based order”, right? 

Meanwhile, a Fed Dallas survey saw firms terrified about looming supply-chain shocks and already asking for rate cuts. They won’t help much, much as markets can’t understand that, again, but that’s what they are asking for if they can’t get tariff relief.

US Senator Paul is quoted by CNN as saying he has the votes to block Trump’s tariffs in the Senate, but the move could be blocked by Speaker Johnson in the House, speaking to the political pressures building, even as there is no election for over 18 months and the prospect of consumer tax cuts ahead: Trump just floated removing income tax on anyone earning less than $200,000. 

Of course, that will threaten to blow the US deficit sky high, Liz Truss style: buckle-up, buckaroos. Unless supply shocks are deflationary due to a slump in demand and yields fall: buckle-up, buckaroos. 

Again, expand your grid and understand this isn’t just about tariffs, and tariffs aren’t just about trade, and trade isn’t the real game either. 

To cap the morning off, the founder of Binance says he thinks the creator of Bitcoin was an AI from the future. Really. 

Expand your grid immediately – or risk blackouts.